FUEL TAX: MOTORISTS TO FOOT BILL

'This is not an austerity budget'

- MAYIBONGWE MAQHINA

FINANCE Minister Enoch Godongwana unveiled the 2025 Budget during a joint sitting of Parliament yesterday, announcing inflationary increases to petrol and diesel prices in order to address the gap left by the abandoned VAT hike.

Delivering his Budget speech during the joint sitting of Parliament, Godongwana said the VAT (Value Added Tax) will remain at 15% as their commitment to listening to South Africans.

"The reality, however, is that the decision to do away with the VAT increase, without a viable alternative source of revenue, significantly reduced our ability to fund additional government programmes and projects to the extent we had deemed necessary," he said.

The Minister said the Budget supported sustainable finances, the social wage and investments in economic growth.

"This is not an austerity budget," he said.

Godongwana also said the Budget was redistributive because it directed 61 cents of every rand of consolidated and non-interest expenditure towards the social wage.

"This is the money that will be spent to fund free basic services like electricity, water, education, healthcare, affordable housing as well as social grants for those in need. This Budget invests over R1 trillion in infrastructure to lift economic growth prospects and improve access to basic services."

He noted that the Budget was crafted in manner that ensured it did not compromise the fiscal strategy of sustainable public finances.